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INCOME AND EXPENSE PROCESS. Presented by Michael Tarello, MAI, ASA Vision Appraisal Technology & James McCathern, CEO Patriot Properties May 21, 2008. INCOME AND EXPENSE PROCEDURES. Income and Expense Management Data Entry of Income and Expense Forms

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INCOME AND EXPENSE PROCESS

Presented by Michael Tarello, MAI, ASA

Vision Appraisal Technology & James McCathern, CEO Patriot Properties

May 21, 2008


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INCOME AND EXPENSE PROCEDURES

  • Income and Expense Management

  • Data Entry of Income and Expense Forms

  • Analysis of Actual Income, Expenses, Vacancies and Capitalization Rates

  • Develop Market Rates

  • Reconciliation Process


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INCOME AND EXPENSE MANAGEMENT

  • Mail Forms Out by First of February

  • Types of Forms

    • DOR Suggested Forms

    • Vendor Form

    • Town Created Forms

    • General Form, Specialized Form or a Combination of Both

    • Use Forms that meets Towns Requirements and Gives the best fit to the CAMA product being Utilized


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INCOME AND EXPENSE MANAGEMENT

  • When do you Have Enough Supporting Data

  • Second Mailer to Specific Properties

  • Gather I/E Info from Neighboring Towns

  • Specialized Properties

  • Nursing Home Forms, Hotel/Motel Financials, Cell Tower Leases, Mobile Home Park Rents


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DATA ENTRY OF I & E FORMS

  • Sort Through Usable and Owner Occupied

  • Organize by Property Type

    • Same Thought Process

  • Do’s and Don’ts

  • Determine Type of Lease

  • Expense Ratios


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ANALYSIS OF ACTUAL INCOME

  • Categorize Income & Expense Data by Use (Office, Retail etc…)

  • New Leases To Old Leases or Step Ups

  • Identify Outliers for Rental Rates, Expense Ratios and Vacancy Rates

  • Determine Location and Utility Adjustments for each Properties Rental Rate


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SET MARKET RATES

  • Using Actual Income and Expense Data to Set Standard Rates Per Use

  • Creating Rental Parameters Based on Size or a Set Unit

  • Determining Adjustments from the Market for Various Elements that Effect Value

  • These Elements are Location, Utility, Quality of Expense Ratios, Vacancy Rates and Risk Factors of Cap Rates

  • Sample Reports, Actual Data and Market Rent Schedules


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RECONCILIATION PROCESS

  • Create an Income/Cost Report by Use

  • Reconcile the Properties by Use to Ensure Equitable Values Per Unit of Comparison, based on Location and Utility

  • Once Complete, Review Values Looking for Outliers

  • Rely on the Old to New Report and the Value per SF Spread Sheet Sorted by Use


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